Scotiabank Clears Its Own ROE Target With a Strong Q3 2026 Beat
As seen on the 24/7 Wall St. homepage on August 25, 2026.
Scotiabank's adjusted return on equity hit 14.2%, clearing its own 14% medium-term target for the first time this cycle. The offset investors have to price: credit provisions rose to $1.08 billion.
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Scotiabank's adjusted earnings per share of $2.28 for Q3 2026 beat the consensus estimate of $2.10, and revenue topped expectations as well, giving the bank a clean sweep on the two metrics analysts watch most closely.
The headline number investors have been waiting for is the adjusted return on equity of 14.2%. That clears the bank's own medium-term target for the first time this cycle, and CEO Scott Thomson called Q3 a record quarter, citing improvements in margins and fee income across all business lines.
Global Banking and Markets was the standout engine, posting its strongest performance of the cycle with earnings up 37% year-over-year, driven by capital markets activity and record underwriting and advisory fees. Canadian Banking extended positive operating leverage into a fourth consecutive quarter, and assets under management grew in Global Wealth Management.
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The offset investors need to price is credit quality, with provisions for credit losses rising to $1.08 billion and gross impaired loans increasing from last quarter. The CET1 ratio dipped to 13.1%, reflecting risk-weighted asset growth and share repurchases as the bank kept returning capital through buybacks and dividends.
Scotiabank has now beaten estimates in five of the last six quarters, and the $2.28 result is the highest reported EPS in that stretch. That suggests the bank's restructuring efforts are beginning to compound in a way the street had not fully anticipated.